The State That May Let Corporations Vote In Elections

Democratic President Biden has called his home “the corporate state of Delaware,” and Republican Sen. Mitt Romney has insisted that “corporations are people, my friend.” Embodying that bipartisan spirit in post-Citizens United America, Delaware Democrats are now advancing a Republican bill that would allow corporations to directly vote in a municipal election.

As GOP states across the country aim to limit voter participation, Delaware’s Democratic-controlled legislature has been considering a bill to allow the expansion of the franchise to businesses. The Republican legislation would explicitly permit the city of Seaford, Delaware “to authorize artificial entities, limited liability corporations’ partnerships and trusts to vote in municipal elections.”

The legislature has until June 30 to vote on the bill, when the legislative session ends.

With hundreds of thousands of corporations officially headquartered in a small Wilmington warehouse, Delaware has long been known for its business fealty. The state’s new legislation would allow corporations to upend the balance of power in Seaford, a small 8,000-person city twenty miles north of Salisbury, Maryland. Just 340 people voted in the most recent election on April 15 — and the bill would potentially provide as many as 234 votes to businesses in the community.

Two years ago, lawmakers in Nevada — known as “the Delaware of the west” — considered legislation from its then-Democratic governor to allow corporations to create their own governments. Now, Delaware could go even further than that failed legislation, giving limited liability companies, or LLCs, the right to vote not only in referenda, but also in regular municipal elections.

Critics say the move is an outgrowth of the Supreme Court’s 2010 decision in Citizens United, which allowed an unprecedented flow of corporate money into elections and asserted that corporations have both personhood and free speech rights.

“After Citizens United, this is another step down the road to corporate tyranny,” Claire Snyder-Hall, executive director of the progressive watchdog group Common Cause Delaware, told The Lever, “It’s bad enough that Citizens United gives corporations free speech rights. Now Seaford wants to give voting rights to corporations.”

On April 11, the Seaford City Council voted three-to-two to pass a charter change that would allow them to put corporations on the voter rolls of the city. According to former city councilmember Jose Santos, who opposed the change, the process felt “rushed” and the deciding vote came from the city’s mayor, David Genshaw, who also sponsored the charter change.

“It didn’t come out of the people, it came out of the mayor,” said Santos. “I didn’t feel like the people were supporting it. In my eyes, that was not a good thing.”

Genshaw attracted controversy in late 2021 when he oversaw the passage of a local ordinance mandating cremation or burial of fetal remains, an ordinance which triggered a costly lawsuit against the city from the state attorney general. Another city council member said of the matter, “This, in my opinion, is more of a personal agenda, and it’s unfortunate we’re using the people of Seaford, and the resources, to drive this agenda.”

During the April election, Santos lost his seat by 54 votes.

The charter change must be approved by the Delaware state legislature. The Democratic-controlled legislature appears to be poised to do so with the potential passage of HB 121. The party has not expressed plans to oppose the legislation, despite the fact that the bill’s sponsors are Seaford’s Republican state representative and senator.

State House Speaker Peter Schwartzkopf (D) said in a committee hearing in May that he is “kind of caught in a pickle here.” He said, “I don’t think it’s a good idea. But I don’t think I want to vote to stop it.”

Schwartzkopf did not respond to a request for comment from The Lever.

Delaware has long been a testing ground for corporate control of democracy. The state is one of just a few that do not charge corporations income tax, and allow corporation officers to hide themselves behind a vast web of secrecy.

Delaware is also home to the 200-year-old Chancery Court, which presides over corporate disputes and helps give the state its pro-business reputation. Its business court has been a model for 25 other states, often delivering more favorable outcomes to corporations than regular district courts would.

This is not the first time that corporate voting has been raised in the state. In 2018, a single person voted 31 times in a referendum using his web of LLCs in Newark, Delaware. The resulting uproar led the 30,000-person city to change its voting rules to prohibit the practice from occurring again.

The prior year, in 2017, the city of Rehoboth Beach, which is also in Schwartzkopf’s district, shot down a proposal from that city to allow LLCs to vote in local elections. The city had previously allowed trusts and nonresident property owners the right to vote, and already allowed LLCs to vote in referendums.

Seaford also allows local property owners to vote in local elections, even if they live elsewhere. Snyder-Hall at Common Cause Delaware voiced concern about the repercussions of the legislature allowing Seaford corporations the right to vote.

“It gives wealthier people the right to vote twice — once in Seaford, and once in the city where they live,” she said. “I consider it another form of voter suppression, except with HB 121 they’re not trying to block voting, but dilute voting in the town.”

Earlier this month, progressive state legislators introduced a bill that would issue a blanket ban on corporate voting in Delaware.